A Cap Table Helps Investors Make Value Property Evaluations
A simple cap table is useful and helpful for:
By making a simple cap table, you'll have a full overview of your organization. This way, you'll have a better knowledge of what stock options are available to you and/or other interested parties. With this knowledge in hand, you can negotiate better stock options prices with interested investors. More importantly, by reducing the potential "risk" associated with your inventory holdings, you'll be able to increase the overall return on your investment.
But wait... isn't there a disadvantage? Indeed, there are some very real downsides associated with using a simple cap table template - especially if you're attempting to do this on your own. Specifically, such templates could provide inaccurate information. While they'd be easy to use for yourself, it's definitely not recommended that you utilize them when representing or trading for your own company.
One thing to keep in mind when using such a Excel file is that Microsoft Excel only directly interacts with one-party data sources. Certain Excel functions cannot be performed on other software. In particular, opening and saving large files (especially in Excel's File menu) may prove problematic should you decide to use a third-party resource.
If you want to use a Excel table for a startup capital investment, think again. While Excel's features are great for getting a bird's eye view of your organization's current holdings, they just won't work as well when you need to make comparisons among various companies' shares. Instead of merely displaying a line graph, Excel will actually provide a split-view pane, which allows you to switch back and forth between two different views - a line graph of the shares and a pie chart of the shares as a whole.
In general, though, a simple cap table (also known as a startup capitalization table) is just a tool that can help you get a bird's eye view of where your investments stand at any given moment. Because most startups are still in early development stages, it's hard to accurately know what their value is. However, an Excel spread sheet can make it much easier to compare how much each company's shares are worth - particularly important when the valuation of these companies is unknown. This can make a huge difference in deciding where and how to raise additional funds.
As mentioned earlier, many spreadsheets like to use rounding errors to give a more accurate figure. Unfortunately, most people don't understand why this is a problem. After all, it's not like these tables are inherently flawed. So if you're still working with a spreadsheet that rounds off figures, it probably makes sense to stick with the original.
Finally, it's important to realize that just because one of your Excel spreadsheets includes a startup capitalization table doesn't mean you'll be using it forever. This data is particularly useful for future funding rounds when a company is just getting started. While it may look at fairly superficial things like ownership shares, it also provides a means of tracking how well the company is doing. And that's what really counts!
Of course, there are plenty of reasons why these tables can be useful as well. For example, they can show founders how much money their companies house is worth based on overall value. This is especially useful if you're thinking about selling your companies house or licensing its products. Many people overlook the fact that founder shares are only part of what makes up a successful business. They don't act like it.
You may also find these tables useful for valuing your own interests, such as stock holdings or property interests. Most spreadsheets on the market include a securities column. With one of these spreadsheets, you can quickly see which types of securities (the ones that are listed on the table) are worth more than others. With this information, you can determine whether you should buy or sell certain securities. In many cases, you can use these securities as input into the valuation formula so that you get an accurate figure quickly.
However, one thing to keep in mind is that not all stocks and securities are included in these types of spreadsheets. In order to use them effectively, you will need to have access to the information for every type of entity that is listed on the current table. This can be extremely time consuming. Fortunately, there is software out there that can help. The Simple Cap Table software provides the foundation for you to build and customize your own proprietary list of equity and common stockholder information.
These spreadsheets have been designed to make it easy to determine capitalization, dividend payment, and warrant expiration dates. They also provide you with information about outstanding securities and other fundamental data. You can even drill down into the data to get more detailed information. This means that you can have the luxury of knowing specific details about each security without having to rely on Excel.